Biotech has a bad day after politicos pounce on another drug pricing scandal
Call it the Hillary effect. Or Martin Shkreli on steroids.
The Nasdaq biotech stock index slid 3.5% Wednesday afternoon after the tsunami of public outrage over Mylan’s EpiPen pricing disaster created a political backlash that left a deep dent in a variety of drug developers’ stock price.
Mylan, run by Heather Bresch, the daughter of U.S. Senator Joe Manchin of West Virginia, kicked up this ruckus after a large segment of the media found that the company had more than quintupled the price of a drug/delivery device that many people need to survive a severe allergic reaction. This includes children and adults who don’t have good enough insurance coverage to ensure access at a reasonable price.
“It’s wrong when drug companies put profits ahead of patients, raising prices without justifying the value behind them,” responded Hillary Clinton, echoing a Tweet from earlier in the year that triggered another index avalanche.
At that point it was biotech bad boy Martin Shkreli — who raced to Mylan’s defense, or whatever you want to call it — who was in Clinton’s cross hairs.
This quote came at about the same time Senators Susan Collins (R-ME) and Claire McCaskill (D-MO) demanded that Bresch turn up in Washington in the next two weeks to attend an “urgent briefing” on the matter.
The primal fear is that a gale force wind that blows in biopharma’s direction could sink more than one boat dependent on routine price hikes. Take Eli Lilly, for example, which sold the osteoporosis drug Forteo for $974.20 in 2010 and jacked the price to $2,551.77 this year.
Making steep annual drug price hikes for aging therapies is an industry standard. If the rest of the big media groups wake up to those implications, or the public turns its attention from single cases to industry practices, the damage could be much worse for everyone.